Key Takeaways
- Shares of Peloton tumbled 12% to $5.76 following guidance for a sixth consecutive fiscal year of declining revenues
- Q4 adjusted earnings per share of $0.13 exceeded Wall Street’s $0.12 estimate; revenue of $607.7M surpassed the $596.6M consensus
- The company’s fiscal 2027 revenue outlook of $2.3B-$2.4B missed analyst projections of $2.44B
- The fitness company’s paid subscriber base declined 8.8% from a year earlier to 2.55 million, with additional losses expected in Q1
- CEO Peter Stern highlighted upcoming product releases later this year as potential drivers for future revenue expansion
Shares of Peloton plummeted 12% to $5.76 during Thursday’s trading session, marking the company’s steepest single-day decline since February 5, 2026. The sharp downturn occurred even as the fitness equipment manufacturer exceeded Wall Street’s profit and sales projections for its fiscal fourth quarter.
Peloton Interactive, Inc., PTON
The company reported adjusted earnings per share of $0.13, topping the analyst consensus estimate of $0.12 by one cent. Quarterly revenue for the period concluded June 30 reached $607.7 million, surpassing Wall Street’s expectation of $596.6 million. The company’s net income climbed to $61.6 million compared to $21.6 million during the corresponding quarter last year.
However, these positive results failed to reassure the investment community.
The company issued fiscal 2027 revenue guidance ranging from $2.3 billion to $2.4 billion. The midpoint of this range indicates a 3.9% year-over-year decrease and trails analyst estimates of $2.44 billion.
This would represent the sixth straight fiscal year of contracting sales for the company. Peloton achieved its revenue peak of $4.02 billion during fiscal 2021.
Continued Subscriber Erosion
The company’s paid subscriber count fell to 2.55 million during the quarter, representing an 8.8% year-over-year decrease. Peloton shed approximately 247,000 paid fitness subscribers throughout the period.
This downward trend shows no signs of reversing. Peloton’s guidance for Q1 anticipates paid subscribers between 2.46 million and 2.49 million, translating to a 9.8% year-over-year decline at the midpoint.
First quarter revenue is projected in the range of $545 million to $565 million, essentially unchanged at the midpoint compared to the same period last year.
In more encouraging developments, the company expects margin expansion. Full-year gross margins are forecast at 54%, reflecting a 140 basis point improvement. Q1 gross margins are guided to 57%, marking a substantial 550 basis point enhancement.
The company projects adjusted EBITDA for fiscal 2027 between $475 million and $525 million, representing a 6.8% increase at the midpoint. Free cash flow targets are set at a minimum of $350 million.
Leadership Emphasizes Innovation Pipeline
During the earnings conference call, CEO Peter Stern maintained an optimistic outlook. He emphasized that new product releases scheduled before year-end would catalyze improvements in both equipment sales volumes and overall revenue performance.
“The product introductions in fiscal 2027, combined with the entry into new categories in fiscal 2028 and beyond, provide the foundation for revenue acceleration,” Stern said.
Since Stern assumed leadership in October 2024, Peloton has pursued an aggressive turnaround strategy. In October 2025, the company implemented price increases, restructured its product portfolio, and introduced AI-powered enhancements.
Prior to the earnings release, the stock had surged 56% from its all-time closing low of $3.71 recorded on March 13, indicating growing investor confidence in the turnaround efforts.
Thursday’s selloff wiped out a significant portion of those recent gains.
Fourth quarter adjusted EBITDA totaled $142.3 million, up from $140 million in the prior-year period, though it fell short of the $150.9 million analyst consensus.
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